Employers' woes push union pension plans to collapse

Crain's Chicago Business reports:

Nearly 230,000 Chicago-area union workers and retirees risk not getting the pensions they've been promised, and some may not get any retirement benefits at all unless Congress comes up with a fix soon.

While lawmakers wrestled with the issue for at least 10 years, $6.26 billion in unfunded retirement obligations was racked up by 30 union-affiliated plans in the city and suburbs that are in financial danger. That doesn't count the Teamsters Central States, Southeast and Southwest Areas pension fund, which alone is $17.55 billion short of what it needs to pay benefits for its nearly 408,000 members nationwide, including 30,000 in Illinois.

It has been a quiet, slow-moving crisis, but Central States could change that. If a solution isn't in place by 2017, the Rosemont-based plan is expected to go belly-up in 10 years or so, experts say.

“I've told politicians many times before, if you really want to know what the 800-pound gorilla in the room is for us, it's our pensions,” says John Bryan, president of Geneva Construction and chairman of the Illinois Road and Transportation Builders Association.

The looming crisis threatens multiemployer plans, which provide benefits to union workers from groups of companies. There are 31 pension funds in the Chicago area whose financial status is endangered or worse, according to the U.S. Department of Labor. Those plans have assets below 80 percent of their obligations or are expected to pay out more in benefits than they take in over the next seven years. Of those 31 funds, 14 plans, including Central States, are deemed in “critical” condition, with assets less than 65 percent of projected benefits.

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